If workers expect inflation, and tend to overestimate actual inflation when they negotiate wage increases, the result will be a continuing
a. shift of AD to the left.
b. shift of AD to the right.
c. recessionary gap.
d. inflationary gap.
c
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Refer to the scenario above. In this game, the dominant strategy equilibrium occurs if ________
A) Firm A chooses Strategy Y, and Firm B chooses Strategy X B) Firm B chooses Strategy Y, and Firm B chooses Strategy X C) Both Firm A and Firm B choose Strategy X D) Both Firm A and Firm B choose Strategy Y
The above figure shows Dana's marginal benefit curve for ice cream. If the price of ice cream is $2 per gallon, then Dana's consumer surplus from the 4th gallon
A) is greater than her consumer surplus from the 8th gallon. B) is the same as her consumer surplus from the 8th gallon. C) is less than her consumer surplus from the 8th gallon. D) could be greater than, equal to, or less than the consumer surplus from the 8th gallon.
Rational expectations theory suggests that ________
A) policy announcements can impact behavior B) policy announcements have no impact on behavior C) unannounced policies have no impact on behavior D) the optimal forecast is identical to the announced policy
Applying supply and demand analysis, other factors held constant, the steeper the supply curve (more inelastic), the larger the burden of a sales tax that is borne by the sellers
a. True b. False Indicate whether the statement is true or false